Thursday, June 18, 2009

Contracts and relationships, Part 1 of 2

Another good question from an anonymous commentor regarded the difference in contracts and delivery methods and the relationship of contractor, owner, and architect to each other. First, let's parse out the differences in the types of contracts; that will make the relationships make a little more sense in the next part of this discussion.

Up until the last couple of decades, the main form of construction delivery process was design-bid-build. In this process, the architect designs the project all the way through the end of construction documents, but sometimes the architect takes the drawings and specs through about 90% CDs and calls them bid documents. Then, contractors are invited to bid on the project, and the architect gets them copies of the drawings and specs. The contractors have a set amount of time, anywhere from one to three weeks, to review the drawings and figure out a set amount for which they think they can build the project. The bids are written down and placed into sealed envelopes and given to either the client or the architect, and the bids are opened in front of witnesses. The client picks which bid they want, and the contractor is hired. If all of the bids are higher than the client's budget, then the client may select a contractor or independent cost estimator to help them get costs out of the project. Another option is that they may decide to go get more funding or reassess what they're asking the architect to design--maybe they shell out part of the space, or maybe they literally shrink the size of the building.

CM/GC is a form of project delivery that is used often on really large projects, like college or hospital buildings (and the one I happen to be most familiar with). Those letters stand for Construction Manager/General Contractor. A CM/GC contractor is brought on during schematic design or even early design development. Their role isn't just limited to building the project and hiring the subcontractors, but it also involves reviewing the drawings and specs periodically for cost and constructability issues. The idea is to keep costs manageable and avoid the "uh-ohs" of a project going over budget and to solve "what's the best way to build this" problems before you start actually building something. It costs less to fix problems on paper than in 3D.

Design-build showed up in the past twenty-five years. Usually, the contractor and the architect both work for the client/owner. However, in design-build, the architect works for the contractor. It's kind of like CM/GC on steroids. The architect and the contractor show up on the client's doorstep as a package deal. The idea behind design-build is that it reduces coordination issues in the field and again, keeps costs under control throughout the project process. Occasionally, design-build firms also have a developer as part of the firm. This means that if a business needs a building, the client can go to a developer-design-builder and find someone who has the initial capital to build a building, design it, and construct it, and the developer-design-builder can rent the building to the client or set up some kind of mortgage or financing option for that client.

Next time: the relationships between clients, owners, architects, and contractors.

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